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on History and Philosophy of Economics |
| By: | David Laidler (University of Western Ontario) |
| Abstract: | The first of these essays was written for a happy occasion – my acceptance of honorary membership in the European Society for the History of Economic Thought. The second marked an altogether sadder event - the death of Mark Blaug. Though at first sight their topics are very different, both in fact deal with some of the limitations inherent in applying contemporary criteria, in the first case those of modern equilibrium modeling, and in the second, those of empirically oriented positive economics, to understanding and assessing the economics of the past. |
| Keywords: | Time; Progress; Empirical Evidence; True Model; Rational Expectations; Money; Quantity Theory; Value Theory; Positive Economics; Empiricism; Formalism; Bimetallism; Gold Standard; Monetarism |
| JEL: | A10 B1 B2 B10 B31 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:uwo:epuwoc:20126&r=hpe |
| By: | Islahi, Abdul Azim |
| Abstract: | Khayr al-Din al-Tunisi, a nineteenth century Tunisian scholar and statesman, thought and worked for her politico-economic strengthening and uplift of Tunisia. He was much impressed by the political system of the West and endeavored to create similar political institutions in his own country. In his work Aqwam al-Masalik fi Ma`rifat Ahwal al-Mamalik (The Surest Path to Knowledge Concerning the Condition of Countries) discussed the economic superiority of the West and offered an agenda for Tunisia to improve its economic and political system. Al-Tunisi’s economic ideas appear quite close to the classical European political economy. |
| Keywords: | Economic ideas of Khair al-din al-Tunisi; History of Islamic Economic thought; Muslim Economic thinking in the 19th century; Maslahah; Capitulation; Ottomans |
| JEL: | B10 B31 B00 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43519&r=hpe |
| By: | Souza, Filipe; Rêgo, Leandro |
| Abstract: | In this article, we analyze how reasonable it is to play according to some Nash equilibria if players have a preference for one of their opponents’ strategies. For this, we propose the concepts of collaborative dominance and collaborative equilibrium. First we prove that, when the collaborative equilibrium exists it is always efficient, what can be seen as a focal property. Further we argue that a reason for players choosing not to collaborate is if they are focusing in security instead of efficiency, in which case they would prefer to play maximin strategies. This argument allows us to reduce the hall of reasonable equilibria for games where a collaborative equilibrium exists. Finally, we point out that two-player zero-sum games do not have collaborative equilibrium and, moreover, if there exists a strategy profile formed only by collaboratively dominated actions it is a Nash equilibrium in such kind of game. |
| Keywords: | Nash Equilibrium; Collaborative Dominance; Two-Players Zero-Sum Games |
| JEL: | C7 |
| Date: | 2012–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43408&r=hpe |
| By: | Souza, Filipe; Rêgo, Leandro |
| Abstract: | We discuss the rationality of burning money behavior from a new perspective: the mixed Nash equilibrium. We support our argument analyzing the first-order derivatives of the mixed equilibrium expected utility of the players with respect to their own utility payoffs in a 2x2 normal form game. We establish necessary and sufficient conditions that guarantee the existence of negative derivatives. In particular, games with negative derivatives are the ones that create incentives for burning money behavior since such behavior in these games improves the player’s mixed equilibrium expected utility. We show that a negative derivative for the mixed equilibrium expected utility of a given player i occurs if, and only if, he has a strict preference for one of the strategies of the other player. Moreover, negative derivatives always occur when they are taken with respect to player i’s highest and lowest game utility payoffs. |
| Keywords: | Mixed Nash Equilibrium; Burning Money; Collaborative Dominance; Security Dilemma |
| JEL: | C7 |
| Date: | 2012–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43410&r=hpe |
| By: | João Carlos Graça; Rafael Marques |
| Abstract: | Paul Veyne has suggested in 1971 that Sociology lacked a study object. Three quarters of a century after Durkheim’s Rules, it had yet to discover social types and orders of preponderant facts. At any rate, Veyne claimed, since Sociology or at least sociologists exist, we must conclude that, under that label, they do something else. Briefly, besides studying the logical conditions of Sociology, we should also sociologically consider it, as well as other neighbour and potentially rival disciplines. In this paper it is argued that, contrary to other scientific fields, Sociology lives in an environment of permanently renewed crisis. Different authors and traditions have indeed asserted exactly that, while based on entirely diverse assumptions. In order to justify the characteristic traits of today’s crisis, we try to list some of the little demons that have contributed to the current situation: 1) The hagiographic syndrome; 2) The isomorphism defence; 3) The acceptance urge. |
| Keywords: | Sociological theory, economics, history, crisis, hagiography, isomorphism, recognition |
| JEL: | A14 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:soc:wpaper:wp032012&r=hpe |
| By: | Kurrild-Klitgaard, Peter |
| Abstract: | The paper sketches an argument for a classical liberal view of the "natural rights" of life, liberty, property and the pursuit of happiness, albeit one based in a semi-"rule-utilitarian" approach, where the defense is based in a "hypothetical imperative" and circumscribed by what social science can tell us that we know and what we cannot know. |
| Keywords: | Freedom; liberty; natural rights; classical liberalism; libertarianism; utilitarianism |
| JEL: | D71 D7 P14 P1 P16 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43542&r=hpe |
| By: | Boppart, Timo; Staub, Kevin |
| Abstract: | A key aspect of generating new ideas is drawing from different elements of past knowledge and combining them into a new idea. In such a process, the diversity of ideas plays a central role. This paper examines the empirical question of how the internet affected the diversity of new research by making the existing literature accessible online. The internet marks a technological shock which affects how academic scientist search for and browse through published documents. Using article-level data from economics journals for the period 1991 to 2009, we document how online accessibility lead academic economists to draw from a more diverse set of literature for their articles, and to write articles which incorporated more diverse contents. -- |
| JEL: | A11 O31 D83 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62040&r=hpe |
| By: | Sheremeta, Roman; Zhang, Jingjing |
| Abstract: | We examine behavior in a three-player trust game in which the first player may invest in the second and the second may invest in the third. Any amount sent from one player to the next is tripled. The third player decides the final allocation among three players. The baseline treatment with no communication shows that the first and second players send significant amounts and the third player reciprocates. Allowing insider communication between the second and the third players increases cooperation between these two. Interestingly, there is an external effect of insider communication: the first player who is outside communication sends 54% more and receives 289% more than in the baseline treatment. As a result, insider communication increases efficiency from 44% to 68%. |
| Keywords: | three-player trust games; experiments; reciprocity; communication |
| JEL: | C72 C91 |
| Date: | 2013–01–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:43533&r=hpe |
| By: | Jon D. Wisman |
| Abstract: | This article addresses the political meaning of President Ronald Reagan's 1981 declaration that "government is the problem." Whereas historically the state had been used by elites to extract as much surplus as possible from producers, with democratization of the franchise, the state became the sole instrument that could limit, or even potentially end, the extraction of workers' surplus. Once control of the state is in principle democratized by the ballot box, the fortunes of the elite depend solely upon controlling ideology. In 1955, Simon Kuznets offered the highly influential conjecture that while rising inequality characterizes early economic development, advanced development promises greater equality. However, rising inequality in most wealthy countries over the past four decades has challenged this hypothesis. What those who embraced Kuznets' conjecture failed to recognize is the dynamics by which the rich, with their far greater command over resources, education, and status, inevitably regain control over ideology and thereby the state. Over the course of history, only the very severe crisis of the 1930s discredited their ideology and led to a sustained period of rising equality. However, by 1980 they had regained ideological ascendancy. This article examines how this struggle over ideology has unfolded in the U.S. since the democratization of the franchise in the late nineteenth century. It concludes with reflections on whether the current crisis holds promise of again de-legitimating the elites' hold on power and ushering in another period of rising equality. |
| Keywords: | Inequality, ideology, class power, democracy, Kuznets' curve. |
| JEL: | B00 N32 N42 O15 Z13 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:amu:wpaper:2013-01&r=hpe |
| By: | David Card; Stefano DellaVigna |
| Abstract: | How has publishing in top economics journals changed since 1970? Using a data set that combines information on all articles published in the top-5 journals from 1970 to 2012 with their Google Scholar citations, we identify nine key trends. First, annual submissions to the top-5 journals nearly doubled from 1990 to 2012. Second, the total number of articles published in these journals actually declined from 400 per year in the late 1970s to 300 per year most recently. As a result, the acceptance rate has fallen from 15% to 6%, with potential implications for the career progression of young scholars. Third, one journal, the American Economic Review, now accounts for 40% of top-5 publications, up from 25% in the 1970s. Fourth, recently published papers are on average 3 times longer than they were in the 1970s, contributing to the relative shortage of journal space. Fifth, the number of authors per paper has increased from 1.3 in 1970 to 2.3 in 2012, partly offsetting the fall in the number of articles per year. Sixth, citations for top-5 publications are high: among papers published in the late 1990s, the median number of Google Scholar citations is 200. Seventh, the ranking of journals by citations has remained relatively stable, with the notable exception of the Quarterly Journal of Economics, which climbed from fourth place to first place over the past three decades. Eighth, citation counts are significantly higher for longer papers and those written by more co-authors. Ninth, although the fraction of articles from different fields published in the top-5 has remained relatively stable, there are important cohort trends in the citations received by papers from different fields, with rising citations to more recent papers in Development and International, and declining citations to recent papers in Econometrics and Theory. |
| JEL: | A1 A11 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18665&r=hpe |
| By: | Marco Pagano (Università di Napoli Federico II, CSEF and EIEF) |
| Abstract: | In the past two decades, academic research has produced massive evidence of the beneficial role of financial development for growth and the allocation of investment. Our current vision, however, is dominated by instances of dysfunctional behavior of financial markets associated with acute and widespread crises. This raises the issue of when and why finance ceases to be the “lifeblood” and turns into a “toxin” for real economic activity. This paper is a first step towards an answer. Its thesis is that the metamorphosis occurs when finance becomes “too large” relative to the underlying economy. At this point finance stops contributing to economic growth and comes to threaten the solvency of banks and systemic stability. A related question is why regulation is not designed so as to prevent the financial industry from growing above this threshold. I argue that the answer lies largely in the symbiosis between politicians and the finance industry. |
| Keywords: | Financial development, financial crisis, risk taking, market failure, political economy |
| JEL: | G01 G18 G21 G28 H81 O16 |
| Date: | 2012–12–23 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:326&r=hpe |
| By: | Boris Gershman |
| Abstract: | The two sides of envy, destructive and constructive, give rise to qualitatively dierent equi-libria, depending on the economic, institutional, and cultural environment. If investment opportunities are scarce, inequality is high, property rights are poorly protected, and social comparisons are strong, society is likely to be in the fear equilibrium," in which better endowed agents restrain their eorts to prevent destructive envy of the relatively poor. Otherwise, the standard \keeping up with the Joneses" competition arises, and envy is satised through suboptimally high eorts. Economic growth expands the production possibilities frontier and triggers an endogenous transition from one equilibrium to the other causing a qualitative shift in the relationship between envy and economic performance: envy-avoidance behavior with its adverse eect on investment paves the way to creative emulation. From a welfare perspective, better institutions and wealth redistribution that move the society away from the low-output fear equilibrium need not be Pareto improving in the short run, as they unleash the negative consumption externality, but in the long run such policies are likely to increase social welfare due to enhanced productivity growth. |
| Keywords: | Economic growth, Envy, Inequality, Property rights, Redistribution |
| JEL: | D31 D62 D74 O10 O43 Z13 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:amu:wpaper:2012-19&r=hpe |
| By: | Han Feng; David Hobson |
| Abstract: | This paper discusses the gambling contest introduced in Seel & Strack (Gambling in contests, Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 375, Mar 2012.) and considers the impact of adding a penalty associated with failure to follow a winning strategy. The Seel & Strack model consists of $n$-agents each of whom privately observes a transient diffusion process and chooses when to stop it. The player with the highest stopped value wins the contest, and each player's objective is to maximise their probability of winning the contest. We give a new derivation of the results of Seel & Strack based on a Lagrangian approach. Moreover, we consider an extension of the problem in which in the case when an agent is penalised when their strategy is suboptimal, in the sense that they do not win the contest, but there existed an alternative strategy which would have resulted in victory. |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1301.0719&r=hpe |